Yoke Har Lee: From baby steps to international sales

Chris Bennett made the first pair of Bobux shoes for daughter Chloe (pictured), now 21. Photo / Steven McNicholl

Yes, shoe manufacturing in New Zealand can still be a viable business. As proof, Chris and Colleen Bennett can point out that about 300,000 of the 700,000 pairs they sell annually are made in this country.

Their company, Bobux, specialises in baby shoes. Started in the couple's garage 18 years ago, the company has become well-known in its specialist niche both in New Zealand and overseas.

Chris Bennett made the first pair of Bobux shoes for his 9-month-old daughter Chloe, who is now 21 and works for the company in a business development role.

Mothers in the Bennetts' coffee group loved the shoes so they made some for them. One weekend the couple took some shoes to Auckland's Victoria Park Market and sold out in the first two hours.

They formed their company in 1991 and today Bobux has a turnover of $10 million and sells its shoes in 35 countries including Britain, Australia, Denmark and Germany.

"We have been growing steadily since 1991. Very early on, we focused our target on niche footwear for newborns to 2 to 3 years old. We have since expanded our range to cover 3 to 4-year-olds," says Chris Bennett. "Bobux has a universal appeal, whether it is to a mother in New Zealand, Australia, Denmark, Holland or Sweden."

Recently Bobux clinched a deal to supply a big order to an upmarket retailer in China - a scenario Bennett describes as being like selling coal to Newcastle.

Bobux shoes for babies are still made in New Zealand. The company has no intention of making those shoes in China, despite it being a manufacturing location of choice for many of the world's shoe companies. "There is no direct advantage for us to make shoes in China as the labour component of our product is low," Bennett says.

However, its range of I-Walk shoes for toddlers are made in Indonesia, some of its clothing is made in China and the company uses China to make another brand of shoe for a different market segment.

Bobux has been able to command premium pricing for its shoes that are are hand-machined by 35 sewing staff.

In the company's early days Bennett was the entrepreneur, designer and salesperson, and made many trips to develop new markets for Bobux. Today he is less involved with the day-to-day running of the company, instead using his time to steer its strategic direction.

Bobux, he says, has just completed a Better by Design programme with New Trade and Enterprise, which resulted in a series of recommendations to help it grow further by rebranding, revamping packaging and lifting its retail display.

Although Bobux had stuck to one line of business - making baby shoes - five years ago it diversified into baby clothes made from New Zealand merino and from cotton.

"Clothing was a natural development as we focus on head-to-toe solutions," says Bennett. "The challenge now is to realign the various brands with our new brand which will be rolled out in February-March 2010."

Bennett, a trained architect, confesses to a love for design. He relies on design principles to solve operational and production problems in his business.

He credits the company's success overseas to making the right choices with its early distributors. "We worked with small distributors who ... were passionate about us and focused on promoting our products, hence growing our market."

Using distributorships was a good initial strategy for a company which did not have huge resources to directly tackle its chosen markets. Dictating payment upfront from customers was another decision he made to protect the company, and goods were only shipped upon receipt of payment.

Bobux is now changing its distribution model, says Bennett. "We are getting a lot more active in New Zealand. In the UK, we are looking to set up a warehouse to hold stocks, and use sales agents in the market."

Having a more direct sales approach in Britain will, says Bennett, enable the company to be more competitive and have more control over how it supplies stores.

Bobux has just opened a flagship store in East Tamaki, Auckland, carrying a wide range of its designs. It also has its own dedicated retail space in an upmarket shopping complex in Shanghai, China.

Technology has helped Bobux reach its consumers. When the company began it cost $2-$3 per phone call to reach distributors. The internet has brought the world to New Zealand and enabled the company to research fads, fashion and pricing.

The strong Kiwi dollar does not make it easy for shoe exporting. Bennett echoes the view of many manufacturers that it is hard to manage an exporting business with a local currency prone to such wild swings.

For other entrepreneurs, Bennett's recommendation is: "Find a niche you can fulfil. No one is going to be able to make it cheaper than the Chinese. When you are in the market, whether it is Wal-Mart or some other place, understand what your customers are looking for."